Correlation Between Vanguard Emerging and Baron Emerging
Can any of the company-specific risk be diversified away by investing in both Vanguard Emerging and Baron Emerging at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Vanguard Emerging and Baron Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Emerging Markets and Baron Emerging Markets, you can compare the effects of market volatilities on Vanguard Emerging and Baron Emerging and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Vanguard Emerging with a short position of Baron Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Emerging and Baron Emerging.
Diversification Opportunities for Vanguard Emerging and Baron Emerging
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vanguard and Baron is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Emerging Markets and Baron Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Emerging Markets and Vanguard Emerging is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Vanguard Emerging Markets are associated (or correlated) with Baron Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Emerging Markets has no effect on the direction of Vanguard Emerging i.e., Vanguard Emerging and Baron Emerging go up and down completely randomly.
Pair Corralation between Vanguard Emerging and Baron Emerging
Assuming the 90 days horizon Vanguard Emerging Markets is expected to generate 0.4 times more return on investment than Baron Emerging. However, Vanguard Emerging Markets is 2.51 times less risky than Baron Emerging. It trades about 0.14 of its potential returns per unit of risk. Baron Emerging Markets is currently generating about -0.1 per unit of risk. If you would invest 1,011 in Vanguard Emerging Markets on September 1, 2024 and sell it today you would earn a total of 10.00 from holding Vanguard Emerging Markets or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Emerging Markets vs. Baron Emerging Markets
Performance |
| Timeline |
| Vanguard Emerging Markets |
| Baron Emerging Markets |
Vanguard Emerging and Baron Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Emerging and Baron Emerging
The main advantage of trading using opposite Vanguard Emerging and Baron Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Emerging position performs unexpectedly, Baron Emerging can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Baron Emerging will offset losses from the drop in Baron Emerging's long position.| Vanguard Emerging vs. Vanguard E Bond | Vanguard Emerging vs. Vanguard Emerging Markets | Vanguard Emerging vs. Vanguard Ultra Short Term Bond | Vanguard Emerging vs. Vanguard Emerging Markets |
| Baron Emerging vs. Fidelity International Growth | Baron Emerging vs. Parnassus Mid Cap | Baron Emerging vs. Df Dent Midcap | Baron Emerging vs. Amg Timessquare International |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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